HomeMy WebLinkAboutStaff Report 4329 (3) 1
Planning and Transportation Commission 1
Verbatim Minutes 2
March 5, 2013 3
4
EXCERPT 5
6
Review and Recommendation to City Council to Adopt New Chapter 18.15 (Residential 7
Density Bonus) to Title 18 (Zoning) of the Palo Alto Municipal Code to Implement 8
Government Code Section 65915 (Continued from January 9, 2013) 9
10
Chair Martinez: We’re going to reconvene and start right up with Item Number 2, Review and 11
recommendation to City Council on the proposed Density Bonus Ordinance. We’ll start with a 12
staff report. 13
14
Tim Wong, Senior Planner, Housing: Good evening Commissioners, my name is Tim Wong and 15
I’m a Senior Planner. On January 9th the Planning Commission, the Planning and Transportation 16
Commission (PTC) first reviewed the initial draft Density Bonus Ordinance and there were a 17
number of comments made, but coming out of that meeting there were three main discussion 18
points. Number one main discussion point about the draft ordinance; the first point was about 19
requiring a pro forma. A second discussion point was quantification of concessions on the menu. 20
And lastly there was also some points made about jurisdiction oversight for these concessions. 21
22
And so staff went back and revised the draft Density Ordinance based on PTC feedback and in 23
regards to the requirement of pro forma, staff has revised that requirement to say that instead of 24
requiring or will require the submittal of a pro forma, staff has revised that language to say “may 25
require financial information.” Staff feels that that requirement should be retained since per the 26
Government code the only way to deny a concession is proof that it is not, that concession is not 27
needed to provide affordable units or lower the affordability. So, but instead of making it 28
mandatory staff has revised it to make it on the Director’s discretion. 29
30
Secondly the second item was quantification or quantifying the concessions. So staff has gone 31
back and quantified the more popular concessions, the setback, daylight plane, and previously 32
the height had already been quantified therefore it hadn’t been touched. Some of the less popular 33
concessions on the menu have not been quantified to hopefully make them more attractive for 34
potential developers in the future. 35
36
And lastly the last point was government or jurisdiction oversight to these concessions. In that 37
staff responds to that comment is that through the menu of concessions and quantifying some of 38
these concessions that is probably what the City can do in overseeing those concessions. The 39
purpose and intent of the government code is to kind of eliminate, not eliminate, limit City 40
oversight or jurisdiction oversight and staff feels that what is before you is probably what the 41
City can do while meeting the purpose and intent of the code. So that concludes staff’s 42
presentation. 43
44
Chair Martinez: Commissioners questions? Commissioner Alcheck? Oh, I don’t know, I should 45
ask that. Are there any members of the public who care to speak on this item? I see none. Ok. 46
Questions, comments from Commissioners. Oh I guess we’ll go with Commissioner Keller. 47
48
2
Commissioner Keller: Yeah, I suggested you formally open and close the public hearing just for 1
formality and then I’ll… 2
3
Chair Martinez: Someone might be rushing in at the last; I’m going to give them a shot at it. 4
5
Commissioner Keller: At least open it anyway. 6
7
Chair Martinez: Oh, ok. Let’s open the public hearing. 8
9
Commissioner Keller: I, based on the fact that we had an extensive discussion on this several, not 10
very, I guess several months ago, I have only one change to the recommendation that I would 11
like to see. And that is that I brought up the issue of special setbacks. And the narrative 12
basically said that special setbacks are setbacks and therefore they’re covered by what’s 13
described. That was not the intent of my suggestion. My suggestion was that special setbacks 14
may not be reduced by concession ever. And this allows setbacks to be reduced. So I was 15
suggesting that special setbacks be excluded from allowing for concessions. And the reason for 16
that is special setbacks are situations where this contextual thing going on in a neighborhood. So 17
for example, along Alma Street there’s a special 30 foot setback and that’s true along a number 18
of our major residential arterials. And I think that that should be respected regardless of the 19
development with the possible exception of Alma Village, which I didn’t agree with either. But 20
essentially those special setbacks should be respected so I would like to exclude them. 21
22
Chair Martinez: I have a question about that. Are the special setbacks somewhere codified that 23
we know what they are or is that just sort of a general term that we apply? 24
25
Amy French, Chief Planning Official: This is Amy French, Chief Planning Official. We have a 26
map that identifies the special setbacks. They were identified on… they’re larger in general than 27
the 20 foot front yard setbacks. These are arterial streets such as Middlefield, Embarcadero and 28
they’re identified through Title 19 of the Palo Alto Municipal Code in reference to the map that 29
was adopted. 30
31
Chair Martinez: Ok and to our City Attorney. Are we in compliance with the State mandate if 32
we adopt such restrictions? 33
34
Cara Silver, Sr. Assistant City Attorney: Thank you Chair. Cara Silver, Senior Assistant City 35
Attorney. What I would suggest if that’s the Commission’s intent, is to specify in the sort of 36
what we call the ministerial menu of concessions that are granted as a almost a matter of right 37
that the special, that those shall not include a waiver from the special setbacks. However, if we 38
were to outright prohibit any granting of some special setbacks even upon a financial finding that 39
the Density Bonus provision is designed to accommodate that could be legally problematic. 40
41
Chair Martinez: Commissioner Keller. 42
43
Commissioner Keller: I would certainly be supportive of the suggestion that Counsel has 44
recommended to us and that would implement what I would want. 45
46
Chair Martinez: Are you done? Commissioner Panelli, comments? Really? The other side? 47
Commissioner Alcheck. 48
49
3
Commissioner Alcheck: I’m prepared to support this. My concern and I mentioned it last time 1
was that we’re sort of setting the bar even higher and in doing so creating a bigger hurdle for 2
developers who may otherwise provide low income or affordable housing. And I guess my 3
request would be that if staff could alert us when an applicant successfully applies for this. That 4
would be of interest to me. Because it’s my understanding that this happens very infrequently 5
and so I’d just like to know if over the next year or so when those things happen because then we 6
can kind of keep track of whether or not this is accomplishing I think the lofty goal of 7
encouraging affordable housing units. But otherwise I support the Motion. I support the making 8
of a Motion. 9
10
Chair Martinez: Thank you. Commissioner Tanaka, comments? Commissioner King. 11
12
Commissioner King: Let’s see. I am walking into this sort of halfway through. I read the 13
minutes from last time and one of the things that was of interest to me were Commissioner 14
Keller’s comments about the time limit on these. And so I guess one question; what is for a 15
family of four what is the moderate income housing limit currently? Can somebody on staff 16
advise? 17
18
Mr. Wong: Commissioner King the median income for a family of four in Santa Clara County is 19
$101,300. So for a moderate income it’s about ten percent higher or $110,000-115,000 for a 20
family of four. 21
22
Commissioner King: Ok, thank you. And so my understanding is the State Density Bonus is a 23
mechanism for the State without funding affordable housing themselves to basically allow us, or 24
requires us to go above and beyond what we consider the reasonable entitlements for a property 25
effectively burdening the community, the neighbors, whomever, that we for whose protection we 26
set those entitlements and then that effective cost that is borne by the community and converted 27
into money for the developer as an incentive then lasts as long as the building is there. And so I 28
had asked staff and they were kind enough to respond today about that and it sounds like on the 29
low and very-low income units that there’s a 30 years and that as a minimum, but their response 30
was that we can’t go beyond that. But on the moderate income housing they’re using 59 years, 31
staff has proposed 59 years. 32
33
To me if our goal over time is to foster affordable housing and in this case moderate affordable 34
housing, moderate income affordable housing, as we run out of more projects over time or we 35
will truly be built out then these won’t get replaced. And so if the overarching goal for the 36
community is to have this amenity then it doesn’t seem logical to me to have a limit 59 years for 37
those, for that requirement. And so I guess my question is am I missing something? Why 38
wouldn’t we just make that in perpetuity or as long as the building exists? And it sounds like 39
from the response today that really we’re doing the 59 years for consistency and because, and I 40
quote, let’s see… consistency and then there was one… I think it basically was to paraphrase 41
because that’s how we’ve done it. And so oftentimes that is how things are retained and so I’d 42
like to bring up the question, why wouldn’t we push on that for, to match the length of the 43
building’s life? 44
45
Ms. Silver: Why don’t I take a stab at that and then Tim may want to add on. The way the 46
moderate income deed restriction works is that there is no requirement in terms of the term under 47
the State law. And so actually under, there’s no limitation. And so the City has some flexibility 48
in determining what the appropriate term for the affordability restriction should be. The way our 49
4
Below Market Rate (BMR) program is administered is that typically a deed restriction will be 1
placed on the first owner of the property and that deed restriction is typically 59 years. And then 2
when that person, if that person does not stay there for 59 years, which typically is the case the 3
new owner will come in and then a second deed restriction will be placed. And that deed 4
restriction will be 59 years according to our program guidelines. So in essence you have that 5
protection just in the way the program is administered. And I think for administrative ease at this 6
point unless there’s a need to vary from our existing procedures it’s easier at a staff level to be 7
able to administer the BMR program in a consistent fashion. 8
9
Commissioner King: Thank you. And so that’s for the ownership, the purchase BMR program. 10
Now do we not have any structures that serve the rental? Or am I missing something that that’s 11
not for moderate that we don’t offer that for moderate income rental? 12
13
Ms. Silver: We don’t typically in Palo Alto have a lot of moderate income rental properties. We 14
may have some and in that case that’s a good point that we could have a longer deed restriction 15
under State law that would be permissive to require that the property developer continue to offer 16
for rental longer than 59 years. Tim do you know if we have many moderate income units’ 17
rentals? 18
19
Mr. Wong: I do not believe we have any BMR units for moderate income, BMR rental units for 20
moderate income. Our BMR program for rentals is specifically for low income, very-low and 21
low. So we don’t have any moderate income rentals. 22
23
Commissioner King: Thank you. So I guess it begs the question if they don’t exist does it bother 24
even, bother talking about it I guess. Do we have a dinosaur rental program at all? I guess not. 25
Ok. Thank you. 26
27
Chair Martinez: Vice-Chair Michael. 28
29
Vice-Chair Michael: So thank you. So I appreciate all the work done by staff in putting this 30
together and I think it’s the right thing to do and the right way to do it; maybe unlike my feelings 31
on the last item. I think that the question about whether and when the staff would find it 32
appropriate to do some financial analysis in relationship to concessions probably doesn’t apply 33
here as much as it does maybe in the case of a Planned Community (PC) where there may be 34
some quantifiable impact on the infrastructure or community in some way that would bear upon 35
the approval process. So I think that having that be discretionary here is perfectly appropriate. 36
37
Also I really appreciate the work that you’ve done to provide a menu of options regarding the 38
concessions because I think that that encourages a open rational economic opportunity for 39
anybody who is considering doing a project. They can pick and choose, price that out, see if it’s 40
feasible and I hope that although we’ve been told that this is not likely to get heavy use that it 41
would be, that we would start to see some projects which would come under the Density Bonus 42
Ordinance and that would help the City meet its commitments regarding affordable housing and 43
the polices in the Housing Element that we’re about to finally adopt and our commitment under 44
the Regional Housing Needs Allocation (RHNA) which, all of which is very important. So I 45
think this is a step forward in that regard and I think it’s very close to being perfect and I think 46
it’s certainly good enough for our purposes and I support it. 47
48
Chair Martinez: Wait your turn young man. No, go ahead. Commissioner Panelli. 49
5
1
Commissioner Panelli: Ms. Silver you opened up a Pandora’s Box for me here because now I 2
really, I felt pretty good about where I was and now I need to understand something a bit better. 3
4
Chair Martinez: I hate it when she does that. 5
6
Commissioner Panelli: You said, if I were to understand correctly, that in the case of the, to 7
Commissioner King’s questions in the case of the moderate income housing those have deed 8
restrictions which typically last 59 years and if there’s a transfer of property, grantee, 9
grantor/grantee within that 59 year process a new 59 year period begins. Is that accurate? 10
11
Ms. Silver: Yes, that’s correct, and that’s only for ownership units, moderate income ownership 12
units. 13
14
Commissioner Panelli: And so what happens in the case of low and very-low income rental 15
properties that are held by whether it’s a profit or non-profit corporation? Those are the, that’s 16
the 30 year restriction. Correct? 17
18
Ms. Silver: Actually for the City’s affordable housing requirements we generally put a 59 year 19
deed restriction or 55. But the State Density Bonus Law provides that if a developer is willing to 20
put a 30 year deed restriction they are by law entitled to the protections of the Density Bonus 21
Law. 22
23
Commissioner Panelli: And at the end of that 30 years what happens? 24
25
Ms. Silver: It reverts to market rate unless there is some other deed restriction that applies to the 26
property. Typically developers use other funding which may have additional affordability 27
covenants that would operate to extend the term. 28
29
Commissioner Panelli: So this is a nuance I did not explicitly understand when I was reading the 30
material. We are effectively at risk of losing the affordable housing that we entitle every 30 31
years after it’s been entitled as such. And so we’re continuously losing; we give density bonuses 32
and concessions and then we effectively should just assume that we’re going to lose that 33
inventory and have to replenish it somehow. This seems like a really bad recipe. It seems like a 34
recipe for disaster. 35
36
Ms. Silver: That is the case for the small number of affordable units that are created through the 37
Density Bonus Program. State law provides that there is, that developers can just provide a 38
simple 30 year deed restriction. Now, you know, that also lines up with the age of housing stock. 39
Housing stock doesn’t last forever. It does typically turnover over a certain period, whether it’s 40
30 years or 50 years depends. And but that, yes, that is the shortfall of the Density Bonus Law. 41
42
Commissioner Panelli: Ok. Thank you. 43
44
Chair Martinez: It seems to me one of the reasons we would find this attractive is that it would 45
encourage developers to kind of take on more responsibility for lower income housing. I don’t 46
hear from Commissioner Alcheck that this is true. I heard that this would provide more 47
constraint. So is it anticipated, have we done any projections about what the outcome of 48
providing this Density Bonus Law would provide to Palo Alto? Tim? 49
6
1
Mr. Wong: I do not, we have not done any projections since it is an owner, it’s not a requirement 2
such as BMR. We can maybe project how many units and we can take 15 percent of those, but 3
for Density Bonus it really is an owner by owner type decision. So there’s no way to really 4
project how many potential density, affordable housing units we’d get through Density Bonus. 5
6
Chair Martinez: So in looking at our Regional Housing Mandate of 2,180 we couldn’t say that 7
two percent would come from something like this? We have no idea of; it’s a question, but no 8
idea of sort of the positive effects of having this Density Bonus Law? 9
10
Aaron Aknin, Assistant Director: I don’t think we could quantify an exact number of units. The 11
thing I would say, I mean I understand what Commissioner Alcheck is saying, but to the point 12
that I would disagree is that it does create some certainty both for the City in terms of developing 13
a menu of concessions and on the developer end to what the City’s expectations are, what we 14
will consider for these concessions. So I think it does help when they’re taking a look at land 15
and what they want to develop. 16
17
Chair Martinez: Correct me if I’m wrong, but hasn’t the only time this has been used is when 18
low income developers wanted to increase the number of housing units like the Eden project on 19
Alma or the one we heard last time from Palo Alto Housing Corp.? Are there others that 20
(interrupted) 21
22
Mr. Wong: Commissioner Martinez, Density Bonus, 195 Page Mill provided 17 units of 23
affordable housing for two concessions and also 2650. Same developer used Density Bonus for 24
concessions also. 25
26
Commissioner King: Sorry. What level was that? 27
28
Mr. Wong: They were rental, so they were at 60 percent of area median income. So they have 29
the 30 year restrictions on them. 30
31
Chair Martinez: So over the last year how many units do we count for that? 32
33
Mr. Wong: It would be 18 between those two developments in the past. 34
35
Chair Martinez: Well did we get a Density Bonus from the Maybell project? 36
37
Mr. Wong: Not really a Density Bonus. They’re asking for concessions, but they’re not asking 38
for additional density. 39
40
Chair Martinez: And what about the Eden housing project on Alma? They got concessions. Did 41
they get increased density? 42
43
Mr. Wong: I don’t think they got additional density. I know they got concessions. I’ll have to 44
double check, but I don’t believe they asked for density. 45
46
Chair Martinez: Ok so we can get, we can give concessions but not get additional housing units. 47
Is that how it’s going to work? 48
49
7
Mr. Wong: That is correct. The ordinance states that you don’t have to request Density Bonuses 1
to get concessions. You can just request for the concessions. 2
3
Chair Martinez: I see. And the, I like the menu of the specific concessions that are being 4
available, but the 50 foot height limit, how did we hit upon that? It sounds like an obvious 5
question, but I’d like to, I’m trying to trap you so you can respond. 6
7
Mr. Wong: Well in no way can it exceed the 50 foot, but residential I believe the maximum 8
height is 35, so it gives them a little additional height if they are to provide affordable units. 9
10
Chair Martinez: So if somebody’s proposing to do this on a mixed use development along El 11
Camino Real they would be limited to 50 foot? 12
13
Mr. Aknin: Correct. As it’s written out they’d be limited to 50 feet. 14
15
Chair Martinez: So as you’re aware the Architectural Review Board (ARB) has suggested that 16
there be some flexibility to the 50 foot height limit. So do we take that into account in this or is 17
that something that we consider separately? 18
19
Mr. Aknin: At this point I think that’s something that you would consider separately, once 20
there’s direction from Council related to the 50 foot height limit and we have a larger community 21
discussion related to that I think that’s the time that it would be appropriate to put it within this 22
discussion. 23
24
Chair Martinez: Ok so there’s a chance that we might come back and revise this? 25
26
Mr. Aknin: I think so. I mean not immediately, but when we have a community wide discussion 27
I think there could be multiple areas within our code that we’d have to take a look at. 28
29
Chair Martinez: Ok, great thank you. Commissioners anything else? Commissioner Keller? 30
31
Commissioner Keller: So a couple of things. First with respect to the affordability of moderate 32
income units does, if they were moderate income rental units does 18.15.040(b) indicate that 33
those units would be deed restricted for 59 years? Is my reading of that correct? That’s on Page 34
8 of the ordinance. 35
36
Ms. Silver: Yes. That’s correct. 37
38
Commissioner Keller: So even if people were to build a moderate income rental property it 39
would still have that deed restriction. Thank you. 40
41
The second issue is that the Density Bonus Law is unlikely to be used in Palo Alto for increasing 42
density and very likely to be used for concessions. 195 Page Mill and another as an example of 43
concessions. 101 Lytton, which is the project at Lytton and Alma originally had concessions as 44
the reason it was, because of the housing that was there that was later deleted, but somehow the 45
concessions stayed anyway. That project had concessions as well. And it’s likely that there will 46
be other projects that come along for which there are concessions. And right now those 47
concessions are by right and therefore essentially any developer can ask any concession at all 48
and there, the City has no, essentially has no way of restricting that. This would basically 49
8
indicate the menu of restrictions that we’re allowing without such a restriction the developer can 1
build things that are not as compatible with the community and the neighboring properties. And 2
so the concession law it basically is, the Density Bonus Law says that the City is supposed to 3
implement it, is supposed to enact and implement the ordinance. Is that correct? 4
5
Ms. Silver: Yes, that’s correct. 6
7
Commissioner Keller: Even though this law has been in existence for eight years or more we 8
have not yet done our duty and implemented such an ordinance so we’re now going ahead and 9
doing that. Is that understanding correct? 10
11
Ms. Silver: Yes, that is. 12
13
Commissioner Keller: Correct. Is there a minimum number of units that are required so if 14
somebody builds a four story building with 2 affordable units on the top floor is, what does that 15
trigger in terms of that? That’s 100 percent affordable, but what do they get for that? 16
17
Mr. Wong: Commissioner Keller, well first Density Bonus Ordinance kicks in when it’s five or 18
more units. So if they only build two units they would not be eligible for concessions or Density 19
Bonus. 20
21
Commissioner Keller: And State law does not require the issuance of bonuses if there are fewer 22
than four units, four units or fewer? 23
24
Mr. Wong: Yes. That was taken verbatim from the code. The five unit criteria threshold. 25
26
Commissioner Keller: Thank you. So I’m going to make hopefully a Friendly Amendment to 27
add in that special setback as (interrupted) 28
29
Chair Martinez: We don’t have a Motion yet. 30
31
Commissioner Keller: We do have a Motion. I thought there was a Motion by Commissioner 32
Alcheck with a Second by Commissioner Tanaka to move staff recommendation. That was not a 33
Motion? 34
35
Chair Martinez: Maybe I wasn’t here. 36
37
MOTION 38
39
Commissioner Keller: Ok, there’s no Motion. Then I’ll make a Motion. So I’ll move the staff 40
recommendation with, as stated with the addition that the special setback language be put in as I 41
discussed with the City Attorney. 42
43
SECOND 44
45
Chair Martinez: Ok. We have a Motion. Any second to the Motion? Yes, Commissioner 46
Alcheck. Care to speak to your Motion? 47
48
9
Commissioner Keller: I’ll just briefly say that this implements the requirement in State law that 1
the City have an implementing ordinance for the Density Bonus Law. And I think this gives a 2
reasonable set of concessions and also has a reasonable way of getting additional data from a 3
developer of low income housing who wishes to have a concession that’s not on the menu. 4
Thank you. 5
6
Chair Martinez: Commissioner Alcheck. 7
8
Commissioner Alcheck: I hope that this ordinance encourages the development of affordable 9
housing units to a greater extent than we’ve seen in the last eight years in this City. So we shall 10
see. 11
12
VOTE 13
14
Chair Martinez: Anyone else? Ok, let’s call for a vote on the Motion. Those in favor say aye 15
(Aye). Got to make sure I got it right this time. Motion passes unanimously. Thank you. Now 16
we will take our 10 minute break for changing of the guard. 17
18
MOTION PASSED (7-0) 19